WIPO releases 2011 cybersquatting stats

WIPO handled more UDRP cases covering more domain names in 2011 than in any other year, but its numbers do not paint a very convincing picture of the cybersquatting landscape.
The organization today announced that it handled 2,764 UDRP cases covering 4,781 domain names last year. The number of cases was up 2.5% over 2010.
The number of domain names covered by these cases was up by 9.4% – an additional 414 domains.
It’s basically meaningless data if you’re looking to make a case that cybersquatting is on the increase.
Obviously, while WIPO is the market-share leader, it is not the only UDRP provider. It sees a representative but non-exhaustive sample of cases.
While UDRP is the standard dispute mechanism for all ICANN-contracted gTLDs, WIPO also has side deals with ccTLD registries to look after cybersquatting cases in their zones.
As WIPO has added more ccTLD deals, it has become harder to make apples-to-apples comparisons year over year.
Based on WIPO’s own records, it received 2,323 UDRP complaints about domains in gTLDs last year, up by 28 cases from 2010, a 1.2% increase.
Given that the number of domains registered in gTLDs increased by at least 8% between January 1 and November 30 2011, cybersquatting seems to be actually on the decrease in relative terms.
And given that the number of UDRP cases filed is so piddlingly small, a single obsessive-compulsive complainant (ie, Lego) can skew the results.
Lego spammed WIPO with more than 160 complaints in 2011. As a result, Denmark is the last year’s fourth-biggest filer after the US, France and UK, according to WIPO, with 202 complaints.
So, if you see any company using these WIPO numbers to rage about cybersquatting in press releases, ICANN comments or Congressional hearings, give them a slap from me. Thanks.
Here’s a table of WIPO’s caseload from 2000 to 2011.
[table id=6 /]
Sadly, the number of UDRP complaints will never reflect the actual amount of cybersquatting going on, particularly when cybersquatters only need to price their domains more cheaply than the cost of a UDRP complaint in order to stay off the radar.
WIPO’s data does raise some interesting questions about the geographic distribution of complainants and respondents, however.
Unsurprisingly, cybersquatting was found to be big business in China, the second most-common home nation, after the US, for respondents. No UDRPs filed with WIPO originated there, however.
Surprisingly, Australia is ranked fourth on the list of countries most likely to harbor alleged squatters, with 171 respondents. But Australia was 13th in terms of complainant location, with just 39 cases.
Read more WIPO data here.

IP lobby files last-minute new gTLD demands

ICANN’s ongoing public comment period into the “perceived” need for “defensive” gTLD applications produced a raft of demands from the intellectual property community, not all of which relate to the subject matter at hand.
With less than one month left before ICANN closes its new gTLD application window, many IP stakeholders have suggested ways to reduce the need to file a defensive applications, with many disputing its characterization as “perceived”. As far as many brands are concerned, there’s nothing “perceived” about it.
Give the imminent closure of the window, a large number of commenters have also suggested ways to reduce the need for defensive domain name registrations at the second level. While debates about trademark protection in domain names will never end, this is likely to be the IP community’s last chance to officially comment before April 12.
Some comments expressed a desire for relatively small tweaks to the existing Rights Protection Mechanisms, others said that entirely new RPMs should be created. In most cases, the proposed amendments heavily favor certain trademark owners at the expense of other registrants, including other trademark owners.
Some suggestions from the IP community would, if adopted, directly impact the business models of new gTLD registries and registrars. Others could be expected to significantly increase the risk that the new gTLD application process will be gamed at a large scale.
This DomainIncite PRO analysis is organized by issue, addressing concepts that emerged from multiple comments. In each case, we look at the likely counter-arguments to the proposals, explore the potential impact on applicants and the new gTLD program and assess the likelihood of each proposal becoming reality.
DI PRO subscribers can read the full analysis here.

Olympic gTLD showdown coming in Costa Rica

While the ICANN public meeting in Dakar last October was notable for a heated clash between governments and the domain name industry, the Costa Rica meeting next week may be characterized by these two recent enemies uniting against a common enemy.
ICANN staff.
Members of the Generic Names Supporting Organization, the Governmental Advisory Committee and the At-Large Advisory Committee all appear to be equally livid about a last-minute new gTLD program surprise sprung by ICANN late last week.
The hitch relates to the ongoing saga about special brand protection for the International Olympic Committee, Red Cross and Red Crescent movements in the new gTLD program.
The need to develop rights protection mechanisms for essentially just three organizations has always been a slightly ridiculous and unnecessary premise, but recently it has assumed symbolic proportions, cutting to the heart of the multistakeholder model itself.
Now, following a perplexing eleventh-hour ICANN mandate, Costa Rica is likely to see some fierce debate about the ICANN decision to kick off the new gTLD program last June.
We expect the GNSO and the GAC to show a relatively united front against ICANN staff on the IOC/RC issue. The At-Large Advisory Committee is also set to throw a bomb or two.
There’s even an outside chance that upcoming talks could wind up adding delay to the next phase of the new gTLD program itself…
The full text of this pre-ICANN 43 policy analysis is available to DomainIncite PRO subscribers here.

Olympics warming to new gTLD bid?

ICANN’s new generic top-level domains Applicant Guidebook may be modified to make it clear that the International Olympic Committee can apply for .olympic if it wants to.
That’s judging by the current state of negotiations in an ICANN working group set up to give special protection to Olympic and Red Cross/Red Crescent trademarks.
Currently, the Guidebook contains a multilingual list of strings related to the Olympic and Red Cross brands that are completely banned from delegation as gTLDs.
But a GNSO working group seems to be rapidly veering towards a recommendation that the ban should be waived if the IOC and Red Cross decide to apply.
The IOC and Red Cross would therefore be able to get their hands on .olympic and .redcross.
Both organizations are closely involved in these talks, which suggests that they may not be entirely hostile to the idea of running their own dot-brand gTLDs after all.
The GNSO working group is also considering the idea that the Olympic and Red Cross trademarks should be protected by string similarity reviews, which is not the case currently.
This could mean, for example, that non-identical gTLDs such as .olympus might have to get IOC backing if they want their applications approved.
The GNSO Council is expected to vote to approve or reject the recommendations at its meeting in San Jose, Costa Rica next month.
It’s not clear whether this would give ICANN enough time to rubber-stamp the decision before the new gTLD application window closes to new applicants March 29.
The decision would not be non-controversial, however. Some ICANN community members are not in favor of granting special trademark protections to anyone.
The GNSO working group has also been tasked by the Governmental Advisory Committee with coming up with second-level protections for the Olympics and Red Cross, but this policy work is unlikely to bear fruit until after the new gTLD application window closes.

.bank trademark canceled after “mistake”

A US trademark on the term “.bank” granted to a likely .bank top-level domain applicant has been canceled just over a week after it was approved.
The Patent & Trademark Office withdrew trademark 4,085,335 yesterday, stating that it had been issued to Asif LLC in error.
The USPTO noticed that the application was for a gTLD string after receiving a letter of protest on January 6, which it forgot to process before granting the trademark.
In a letter to Asif’s lawyers, the USPTO noted that it has a policy of not approving trademarks for TLDs, adding:

The USPTO has broad authority to correct mistakes…
In view of the letter of protest prior to registration and the clear violation of the USPTO’s established policy that marks such as this do not function as trademarks, this registration is canceled as inadvertently issued

Asif, which recently changed its name to Domain Security Company, intends to apply to ICANN for .bank and .secure, but as I reported last week it faces an uphill battle given rival .bank bids.
It used a Wild West Domains reseller account to demonstrate to the USPTO it was using the .bank mark.
It’s not currently clear who was responsible for the letter of protest.

Stop the nonsense about TLD-squatting

Barely a day has passed recently without a news report about how companies are being forced to apply for new top-level domains to prevent cybersquatters moving in on their brands.
It’s complete nonsense, of course, brought about by a lack of basic research coupled with years of bad feeling towards the domain name industry and an ICANN new gTLDs outreach campaign that spent six months failing to effectively tackle widely held misconceptions.
Cybersquatters are not going to apply for new gTLDs. If they do, they won’t be approved.
Unfortunately, this does not mean that we’re not going to see lots of “defensive” new gTLD applications.
Due to the way the program is structured, it may actually make strategic sense for some companies to apply for a dot-brand gTLD even if they are otherwise pretty clueless about domain names.
It worries me to think that a few years from now the TLD space – which is currently running at almost 100% utilization – will start to resemble the second level in pretty much every major TLD, with lots of essentially unused, redundant defensive domain names.
I don’t think this will be good for the domain name industry or ICANN.
That said, what looks good for ICANN and the domain name industry is of little concern to brand owners – they just want to make sure their brands are not damaged by the program.
I’ve written a 4,500-word paper analyzing the actual need for companies to file “defensive” gTLD applications, which is now available to DomainIncite PRO subscribers.

Tiny start-up secures .bank gTLD trademark

A likely new gTLD applicant has secured a US trademark on the term “.bank”.
Asif LLC, a Wisconsin start-up with an undisclosed number of employees, won approval for the trademark 4,085,335 on Tuesday, for use in “domain name registration services”.
(UPDATE: Asif actually does business now as Domain Security Company LLC, but the trademark application was filed under its former name.)
As Domain Name Wire reported last year, Asif became a Go Daddy reseller in order to provide the US Patent & Trademark Office with proof it was using the brand.
It appears the gambit was successful, and the company now has a card to play in its inevitable battle with other .bank applicants, such as the BITS/American Bankers Association project.
Mary Iqbal, Asif’s CEO, told DomainIncite today that the company also has a trademark pending in Pakistan, where it has existing business connections.
Iqbal says she’s serious about her .bank application. It’s an idea she’s been working on for a few years.
Asif has been talking to security companies about providing the security infrastructure for the gTLD and has already signed up with a registry back-end provider, she said.
All she was prepared to disclose at the moment is that one of these partners has “ground-breaking encryption technology” and that the company has solid plans for its security profile.
The .bank gTLD would of course be limited to manually verified financial institutions, Iqbal confirmed.
Explaining the reseller site used to get the trademark, Iqbal said: “We intend to use that in future to sell .bank domain names but for now we’re selling names in other TLDs.”
Asif also has a pending US trademark on “.secure”, which it also plans to apply for as a gTLD.
Iqbal said that the company plans to offer small and medium sized e-commerce businesses extra security services if they redirect their customers to their .secure domain at the checkout.
While I am unaware of any other public .secure applicants, the .bank gTLD is expected to be contested.
A joint project of the American Bankers Association and BITS, part of the Financial Services Roundtable, has already essentially confirmed that it plans to apply for .bank and possibly two other financial gTLDs, using Verisign as its back-end.
“We don’t know for sure if they’re going to apply for .bank,” Iqbal said, however. “If somebody else does apply, all I can say that we are the legal rights holder for .bank.”
Holding a trademark on a term gives companies the right to file a Legal Rights Objection against new gTLD applicants.
However, as much as I love an entrepreneur, I estimate the chances of Asif getting its .bank application approved at roughly zero, trademark or not.
There are about half a dozen different reasons Asif would probably not pass the Legal Rights Objection test, which would leave it in a contention set with other .bank applicants.
The final mechanism offered by ICANN to resolve contested gTLDs is an auction, and nobody goes into an auction against the American Bankers Association expecting to win.
ICANN also encourages applicants in contention sets to talk it out amongst themselves before resorting to auction. If Asif is lucky, a rival .bank applicant will pay it to go away before the string goes to auction.
If it’s very lucky, somebody will acquire the trademark before the company – which Iqbal said is already funded but would welcome additional investment – splashes out $185,000 on its application fee.
The Asif .bank application also stands a substantial chance of being objected to by governments.
ICANN’s Governmental Advisory Committee, and in particular the influential US representative, has very strong views on gTLDs purporting to represent regulated industries.
If the GAC is faced with a choice between a .bank backed by the ABA and BITS with a Verisign back-end, and one backed by a tiny Wisconsin start-up, I believe there’s a pretty good chance the Wisconsin start-up is going to find itself on the receiving end of a GAC Advice objection.
Just a hunch.

Key-Systems sued over brand protection trademark

Israeli domain name registrar Domain The Net Technologies has filed a preemptive lawsuit against German competitor Key-Systems over their respective brand management trademarks.
According to the complaint, Domain The Net filed for a US trademark on the term “BrandShield”, which it uses to market brand protection services at brandshield.com.
Key-Systems, which runs a similar service called BrandShelter, filed an opposition to Domain The Net’s trademark application last October, due to the alleged potential for confusion.
Anticipating a possible lawsuit, Domain The Net has therefore sued first, asking the District Court in Virginia to declare that BrandShield does not infringe the BrandShelter trademark.
The complaint lists several dozen live brand+word trademarks to demonstrate that no one company should have exclusive rights to the word “brand”.
You can view the complaint, which was filed yesterday, in PDF format here.
(Hat tip: @GeorgeKirikos)

Strickling drops last-minute bombshell on new gTLDs

Larry Strickling, the man most responsible for overseeing ICANN in the US administration, has given an unexpected last-minute boost to opponents of the new generic top-level domains program.
In a letter to ICANN chair Steve Crocker tonight, Strickling says governments may intervene this May to impose new trademark protection mechanisms on the new gTLD program
Echoing the words of several Congressmen, Strickling, head of the National Telecommunications and Information Administration, said that after the first-round applications have been filed, ICANN might want to consider a “phased-in” approach.

Once the list of strings is made public, NTIA, soliciting input from stakeholders and working with colleagues in the Governmental Advisory Committee (GAC), will evaluate whether additional protections are warranted at the second level. Having the ability to evaluate the actual situations or conflicts presented by the applied for strings, rather than merely theoretical ones, will certainly assist and focus everyone’s efforts to respond to problems should they arise.

The letter could be seen as a win for the trademark lobby, which has been pressing the NTIA, Department of Commerce and Congress for months to delay or block the program.
However, reading between the lines it appears that Strickling believes the trademark protections already in the program are probably adequate, just woefully misunderstood.
The letter spends more time politely tearing into ICANN’s atrocious outreach campaign, observing that many trademark owners still “are not clear about the new gTLD program”.
Strickling pleads with ICANN’s leadership to raise awareness of the protections that already exist, to calm the nerves of companies apparently convinced by industry scaremongering that they’re being forced to apply for “dot-brand” gTLDs defensively.

…in our recent discussions with stakeholders, it has become clear that many organizations, particularly trademark owners, believe they need to file defensive applications at the top level.
…
We think, and I am sure ICANN and its stakeholders would agree, that it would not be healthy for the expansion program if a large number of companies file defensive top-level applications when they have no interest in operating a registry. I suggest that ICANN consider taking some measures well before the application window closes to mitigate against this possibility.

The themes are repeated throughout the letter: ICANN has not done enough to educate potential applicants about the new gTLD program, and brand owners think they’ve got a gun to their head.

…it has become apparent that some stakeholders in the United States are not clear about the new gTLD program. I urge you to engage immediately and directly with these and other stakeholders to better educate them on the purpose and scope of the program as well as the mechanisms to address their concerns.

I’m sure this is a letter Strickling didn’t want to send.
Recently, he talked openly about how trademark owners pressuring the US government to overrule ICANN’s decision-making risked raising the hackles of repressive regimes around the world and leading to an internet governed by the UN
Letters like this certainly don’t help his cause, but the political pressure in Washington DC has evidently forced his hand.
Will this derail next week’s launch of the program? Probably not.
Does it raise a whole bunch of questions the ICANN community had thought it had put to bed? You bet it does.
Read the letter here (pdf).

ICM opens can of worms with .xxx domain seizures

ICM Registry has suspended several dozen .xxx domain names registered by cybersquatters.
It’s believed to be unprecedented for a mainstream registry to unilaterally shut down domains purely on the grounds of alleged cybersquatting, as I reported for The Register earlier today.
ICM took down 70 to 80 domains including washingtonpost.xxx, cnbc.xxx and verizonwireless.xxx because it decided that the domains infringed trademarks and were therefore abusive.
Many belonged to the squatter Domain Name Wire first fingered as the registrant of huffingtonpost.xxx, named in Whois as Justin Crews.
Crews had told MSNBC that he planned to sell the domains at profit.
There was no UDRP arbitration, no court order, just a breach of the .xxx registry-registrant agreement, which gives ICM the right to suspend squatted domains at will.
This is the relevant part of the agreement, which all .xxx registrants must agree to:

You acknowledge and agree that the Registry reserves the right to disqualify you or your agents from making or maintaining any Registrations or Reservations in the .XXX TLD if you are found to have repeatedly engaged in abusive registrations, in its sole discretion.

I blogged back in May about why it might not be necessary to spend a fortune on defensive registrations in .xxx, given the existence of this policy and others.
Nevertheless, while it may take a while for the implications to become clear, I think the suspensions represent a very significant development.
Coming so soon after the end of ICM’s sunrise period, which saw many organizations spend thousands on useless non-resolving defensive registrations, I wouldn’t be surprised if many companies feel like they may have wasted their money.
If you’ve just spent $200 defending your brand, I imagine it would be quite annoying to see the likes of verizonwireless.xxx or businessweek.xxx get the same protection for free.
I would also not be surprised if, from now on, trademark attorneys trying to defend their rights in .xxx first contacted ICM, rather than WIPO or the National Arbitration Forum.
Why spend thousands on a UDRP complaint when you can just send a legal nastygram to ICM?
ICM president Stuart Lawley told DI today that this wave of suspensions was done independently, not in response to any legal demands.
Still, the precedent has been set: ICM will suspend domains for free, under certain circumstances.
What those circumstances are is less clear.
Lawley said that ICM will not get involved in complaints about individual domains – but it will shut down cybersquatters with multiple infringements.
But what constitutes cybersquatting? UDRP has a definition, but I’m not sure ICM does. It may be quite subjective.
It’s also not clear what ICM will do with the suspended domains, not all of which necessarily infringe trademarks. Some may be bona fide, but the ICM policy is to take down the registrant’s entire portfolio.
So will those non-infringing domains be released back into the pool? And if so, how will ICM determine which are squats and which are not?
And what about the ones that are squats? Will they be released?
AOL may be content for huffingtonpost.xxx to remain suspended forever. As long as it’s suspended, the company does not have to worry about defensive registration fees.
But consider gayroom.xxx, which was also suspended.
The owner of gayroom.com owns a trademark on the word “gayroom”. Gayroom.com is a porn site, but one that has chosen not to buy its equivalent .xxx domain.
What if it changes its mind? If gayroom.com wants gayroom.xxx in future, is there a way to take it out of suspension, or is the company stuck without its .xxx forever, just because a cybersquatter got there first?
ICM’s policies do not seem to answer this question and the company has not yet revealed its plans for the suspended domains.
As a post-script, I should note that Huffington Post owner AOL is currently listed as the registrant of huffingtonpost.xxx in the Whois record.
It’s not yet clear why this is the case, but Lawley stated unequivocally today that the apparent transfer is completely unrelated to ICM’s own crackdown.
Go Daddy, the registrar of record for the domain, declined to comment, citing its customer privacy policy.
Did the cybersquatter transfer the domain to AOL before the suspension? Did he sell it to AOL? Or did he just update the Whois with phoney data? Either seems possible at this point.